California contractors are required to carry a $25,000 license bond to maintain an active license with the CSLB.
Purpose of the Contractor License Bond
A California Contractor License Bond is a surety bond required by the California State License Board (CSLB) to protect consumers and employees from financial harm caused by defective work, contract violations, or unpaid wages. The bond is a financial guarantee, not insurance for the contractor, and ensures that claims can be paid without the injured party pursuing the contractor directly. If a claim is paid, the contractor must reimburse the surety company for the full amount plus any legal costs.
Bond Requirements
Amount: $25,000 for all contractors as of January 1, 2023, per Senate Bill 607.
Form: Must be written on a form approved by the Attorney General and signed by the surety company's attorney-in-fact.
Filing: The bond must be received at the CSLB headquarters within 90 days of its effective date.
Eligibility: Required before issuing, renewing, or reactivating a license.
Surety: Must be issued by a company licensed through the California Department of Insurance.
Additional Bonds
Bond of Qualifying Individual: Required if the license is qualified by a Responsible Managing Employee (RME) or a Responsible Managing Officer RMO) who owns less than 10% of the corporation.
Maintaining the Bond
The bond must remain active continuously; lapses trigger automatic license suspension.
Key Considerations
The bond protects the public and employees, not the contractor.
Contractors are responsible for reimbursing the surety if a claim is paid.
Understanding bond requirements is critical to avoiding license suspension and ensuring compliance with CSLB regulations.
For more information, contractors can consult the CSLB’s official bond requirements page or contact a licensed surety company to obtain or maintain their bond